Venezuela plans to introduce new forex system

CARACAS, July 6 (Xinhua) -- Venezuela is to install a new foreign exchange system as part of its comprehensive efforts to guarantee economic balance, said Vice President for Economic Affairs Rafael Ramirez on Sunday.

"We are going to introduce a new exchange system. It is very complex to manage three exchange rates," said Ramirez in an interview in with a local TV channel.

Ramirez, who also serves as oil and mining minister, said that to install the new exchange system, Venezuela should reach a single exchange rate, so the government has to continue to reduce inflation and fiscal deficits.

With the introduction of the second Complementary Administration System for Foreign Exchange (Sicad 2) in March, the Latin American nation now has a foreign exchange platform that features three exchange rates for different types of transactions.

Under the three-pronged regime, U.S. dollars are priced at 6.3 Venezuelan bolivars for preferential goods, at 11.6 bolivars for some other items, and at somewhere between 6.3 bolivars and the black-market prices of about 80 bolivars under Sicad 2.

"We have to consolidate the fiscal and monetary policies before implementing the new exchange system, which will happen in a short term," said Ramirez, noting that Sicad 2 still "has been a powerful tool to reduce fiscal deficits."

Venezuela introduced foreign currency controls in 2003 to prevent massive capital outflows and to redirect the country's oil revenues to social and economic programs.